WGU C253 Advanced Managerial
Accounting exam with correct answers
Absorption vcosting v- vcorrect vanswerA vcosting vmethod vthat vincludes vall vmanufacturing vcosts—direct
vmaterials, vdirect vlabor, vand vboth vvariable vand vfixed vmanufacturing voverhead—in vunit vproduct vcosts.
Activity v- vcorrect vanswerAn vevent vthat vcauses vthe vconsumption vof voverhead vresources vin van
vorganization.
Activity vbase v- vcorrect vanswerA vmeasure vof vwhatever vcauses vthe vincurrence vof va vvariable vcost. vFor
vexample, vthe vtotal vcost vof vsurgical vgloves vin va vhospital vwill vincrease vas vthe vnumber vof vsurgeries
vincreases. vTherefore, vthe vnumber vof vsurgeries vis vthe vactivity vbase vthat vexplains vthe vtotal vcost vof
vsurgical vgloves.
Activity vcost vpool v- vcorrect vanswerA v"bucket" vin vwhich vcosts vare vaccumulated vthat vrelate vto va vsingle
vactivity vmeasure vin van vactivity-based vcosting vsystem.
Activity vmeasure v- vcorrect vanswerAn vallocation vbase vin van vactivity-based vcosting vsystem; videally, va
vmeasure vof vthe vamount vof vactivity vthat vdrives vthe vcosts vin van vactivity vcost vpool.
Activity vvariance v- vcorrect vanswerThe vdifference vbetween va vrevenue vor vcost vitem vin vthe vflexible
vbudget vand vthe vsame vitem vin vthe vstatic vplanning vbudget. vAn vactivity vvariance vis vdue vsolely vto vthe
vdifference vbetween vthe vactual vlevel vof vactivity vused vin vthe vflexible vbudget vand vthe vlevel vof vactivity
vassumed vin vthe vplanning vbudget.
Activity-based vcosting v(ABC) v- vcorrect vanswerA vcosting vmethod vbased von vactivities vthat vis vdesigned vto
vprovide vmanagers vwith vcost vinformation vfor vstrategic vand vother vdecisions vthat vpotentially vaffect
vcapacity vand vtherefore vfixed vas vwell vas vvariable vcosts.
Activity-based vmanagement v(ABM) v- vcorrect vanswerA vmanagement vapproach vthat vfocuses von
vmanaging vactivities vas va vway vof veliminating vwaste vand vreducing vdelays vand vdefects.
,Administrative vcosts v- vcorrect vanswerAll vexecutive, vorganizational, vand vclerical vcosts vassociated vwith
vthe vgeneral vmanagement vof van vorganization vrather vthan vwith vmanufacturing vor vselling.
Allocation vbase v- vcorrect vanswerA vmeasure vof vactivity vsuch vas vdirect vlabor-hours vor vmachine-hours
vthat vis vused vto vassign vcosts vto vcost vobjects.
Avoidable vcost v- vcorrect vanswerA vcost vthat vcan vbe veliminated vby vchoosing vone valternative vover
vanother vin va vdecision. vThis vterm vis vsynonymous vwith vdifferential vcost vand vrelevant vcost.
Batch-level vactivities v- vcorrect vanswerActivities vthat vare vperformed veach vtime va vbatch vof vgoods vis
vhandled vor vprocessed, vregardless vof vhow vmany vunits vare vin vthe vbatch. vThe vamount vof vresource
vconsumed vdepends von vthe vnumber vof vbatches vrun vrather vthan von vthe vnumber vof vunits vin vthe vbatch.
Benchmarking v- vcorrect vanswerA vsystematic vapproach vto videntifying vthe vactivities vwith vthe vgreatest
vpotential vfor vimprovement.
Bill vof vmaterials v- vcorrect vanswerA vdocument vthat vshows vthe vquantity vof veach vtype vof vdirect vmaterial
vrequired vto vmake va vproduct.
Bottleneck v- vcorrect vanswerA vmachine vor vsome vother vpart vof va vprocess vthat vlimits vthe vtotal voutput vof
vthe ventire vsystem.
Break-even vpoint v- vcorrect vanswerThe vlevel vof vsales vat vwhich vprofit vis vzero.
Budget v- vcorrect vanswerA vdetailed vplan vfor vthe vfuture vthat vis vusually vexpressed vin vformal vquantitative
vterms.
Capital vbudgeting v- vcorrect vanswerThe vprocess vof vplanning vsignificant vinvestments vin vprojects vthat
vhave vlong-term vimplications vsuch vas vthe vpurchase vof vnew vequipment vor vthe vintroduction vof va vnew
vproduct.
Cash vbudget v- vcorrect vanswerA vdetailed vplan vshowing vhow vcash vresources vwill vbe vacquired vand vused
vover va vspecific vtime vperiod.
, Committed vfixed vcosts v- vcorrect vanswerInvestments vin vfacilities, vequipment, vand vbasic vorganizational
vstructure vthat vcan't vbe vsignificantly vreduced veven vfor vshort vperiods vof vtime vwithout vmaking
vfundamental vchanges.
Common vcost v- vcorrect vanswerA vcost vthat vis vincurred vto vsupport va vnumber vof vcost vobjects vbut vthat
vcannot vbe vtraced vto vthem vindividually. vFor vexample, vthe vwage vcost vof vthe vpilot vof va v747 vairliner vis va
vcommon vcost vof vall vof vthe vpassengers von vthe vaircraft. vWithout vthe vpilot, vthere vwould vbe vno vflight vand
vno vpassengers. vBut vno vpart vof vthe vpilot's vwage vis vcaused vby vany vone vpassenger vtaking vthe vflight.
Common vfixed vcost v- vcorrect vanswerA vfixed vcost vthat vsupports vmore vthan vone vbusiness vsegment, vbut
vis vnot vtraceable vin vwhole vor vin vpart vto vany vone vof vthe vbusiness vsegments.
Constraint v- vcorrect vanswerA vlimitation vunder vwhich va vcompany vmust voperate, vsuch vas vlimited
vavailable vmachine vtime vor vraw vmaterials, vthat vrestricts vthe vcompany's vability vto vsatisfy vdemand.
Contribution vapproach v- vcorrect vanswerAn vincome vstatement vformat vthat vorganizes vcosts vby vtheir
vbehavior. vCosts vare vseparated vinto vvariable vand vfixed vcategories vrather vthan vbeing vseparated vinto
vproduct vand vperiod vcosts vfor vexternal vreporting vpurposes
Contribution vmargin v- vcorrect vanswerThe vamount vremaining vfrom vsales vrevenues vafter vall vvariable
vexpenses vhave vbeen vdeducted.
Contribution vmargin vratio v(CM vratio) v- vcorrect vanswerA vratio vcomputed vby vdividing vcontribution
vmargin vby vsales.
Control v- vcorrect vanswerThe vprocess vof vgathering vfeedback vto vensure vthat va vplan vis vbeing vproperly
vexecuted vor vmodified vas vcircumstances vchange.
Conversion vcost v- vcorrect vanswerDirect vlabor vcost vplus vmanufacturing voverhead vcost.
Cost vbehavior v- vcorrect vanswerThe vway vin vwhich va vcost vreacts vto vchanges vin vthe vlevel vof vactivity.
Accounting exam with correct answers
Absorption vcosting v- vcorrect vanswerA vcosting vmethod vthat vincludes vall vmanufacturing vcosts—direct
vmaterials, vdirect vlabor, vand vboth vvariable vand vfixed vmanufacturing voverhead—in vunit vproduct vcosts.
Activity v- vcorrect vanswerAn vevent vthat vcauses vthe vconsumption vof voverhead vresources vin van
vorganization.
Activity vbase v- vcorrect vanswerA vmeasure vof vwhatever vcauses vthe vincurrence vof va vvariable vcost. vFor
vexample, vthe vtotal vcost vof vsurgical vgloves vin va vhospital vwill vincrease vas vthe vnumber vof vsurgeries
vincreases. vTherefore, vthe vnumber vof vsurgeries vis vthe vactivity vbase vthat vexplains vthe vtotal vcost vof
vsurgical vgloves.
Activity vcost vpool v- vcorrect vanswerA v"bucket" vin vwhich vcosts vare vaccumulated vthat vrelate vto va vsingle
vactivity vmeasure vin van vactivity-based vcosting vsystem.
Activity vmeasure v- vcorrect vanswerAn vallocation vbase vin van vactivity-based vcosting vsystem; videally, va
vmeasure vof vthe vamount vof vactivity vthat vdrives vthe vcosts vin van vactivity vcost vpool.
Activity vvariance v- vcorrect vanswerThe vdifference vbetween va vrevenue vor vcost vitem vin vthe vflexible
vbudget vand vthe vsame vitem vin vthe vstatic vplanning vbudget. vAn vactivity vvariance vis vdue vsolely vto vthe
vdifference vbetween vthe vactual vlevel vof vactivity vused vin vthe vflexible vbudget vand vthe vlevel vof vactivity
vassumed vin vthe vplanning vbudget.
Activity-based vcosting v(ABC) v- vcorrect vanswerA vcosting vmethod vbased von vactivities vthat vis vdesigned vto
vprovide vmanagers vwith vcost vinformation vfor vstrategic vand vother vdecisions vthat vpotentially vaffect
vcapacity vand vtherefore vfixed vas vwell vas vvariable vcosts.
Activity-based vmanagement v(ABM) v- vcorrect vanswerA vmanagement vapproach vthat vfocuses von
vmanaging vactivities vas va vway vof veliminating vwaste vand vreducing vdelays vand vdefects.
,Administrative vcosts v- vcorrect vanswerAll vexecutive, vorganizational, vand vclerical vcosts vassociated vwith
vthe vgeneral vmanagement vof van vorganization vrather vthan vwith vmanufacturing vor vselling.
Allocation vbase v- vcorrect vanswerA vmeasure vof vactivity vsuch vas vdirect vlabor-hours vor vmachine-hours
vthat vis vused vto vassign vcosts vto vcost vobjects.
Avoidable vcost v- vcorrect vanswerA vcost vthat vcan vbe veliminated vby vchoosing vone valternative vover
vanother vin va vdecision. vThis vterm vis vsynonymous vwith vdifferential vcost vand vrelevant vcost.
Batch-level vactivities v- vcorrect vanswerActivities vthat vare vperformed veach vtime va vbatch vof vgoods vis
vhandled vor vprocessed, vregardless vof vhow vmany vunits vare vin vthe vbatch. vThe vamount vof vresource
vconsumed vdepends von vthe vnumber vof vbatches vrun vrather vthan von vthe vnumber vof vunits vin vthe vbatch.
Benchmarking v- vcorrect vanswerA vsystematic vapproach vto videntifying vthe vactivities vwith vthe vgreatest
vpotential vfor vimprovement.
Bill vof vmaterials v- vcorrect vanswerA vdocument vthat vshows vthe vquantity vof veach vtype vof vdirect vmaterial
vrequired vto vmake va vproduct.
Bottleneck v- vcorrect vanswerA vmachine vor vsome vother vpart vof va vprocess vthat vlimits vthe vtotal voutput vof
vthe ventire vsystem.
Break-even vpoint v- vcorrect vanswerThe vlevel vof vsales vat vwhich vprofit vis vzero.
Budget v- vcorrect vanswerA vdetailed vplan vfor vthe vfuture vthat vis vusually vexpressed vin vformal vquantitative
vterms.
Capital vbudgeting v- vcorrect vanswerThe vprocess vof vplanning vsignificant vinvestments vin vprojects vthat
vhave vlong-term vimplications vsuch vas vthe vpurchase vof vnew vequipment vor vthe vintroduction vof va vnew
vproduct.
Cash vbudget v- vcorrect vanswerA vdetailed vplan vshowing vhow vcash vresources vwill vbe vacquired vand vused
vover va vspecific vtime vperiod.
, Committed vfixed vcosts v- vcorrect vanswerInvestments vin vfacilities, vequipment, vand vbasic vorganizational
vstructure vthat vcan't vbe vsignificantly vreduced veven vfor vshort vperiods vof vtime vwithout vmaking
vfundamental vchanges.
Common vcost v- vcorrect vanswerA vcost vthat vis vincurred vto vsupport va vnumber vof vcost vobjects vbut vthat
vcannot vbe vtraced vto vthem vindividually. vFor vexample, vthe vwage vcost vof vthe vpilot vof va v747 vairliner vis va
vcommon vcost vof vall vof vthe vpassengers von vthe vaircraft. vWithout vthe vpilot, vthere vwould vbe vno vflight vand
vno vpassengers. vBut vno vpart vof vthe vpilot's vwage vis vcaused vby vany vone vpassenger vtaking vthe vflight.
Common vfixed vcost v- vcorrect vanswerA vfixed vcost vthat vsupports vmore vthan vone vbusiness vsegment, vbut
vis vnot vtraceable vin vwhole vor vin vpart vto vany vone vof vthe vbusiness vsegments.
Constraint v- vcorrect vanswerA vlimitation vunder vwhich va vcompany vmust voperate, vsuch vas vlimited
vavailable vmachine vtime vor vraw vmaterials, vthat vrestricts vthe vcompany's vability vto vsatisfy vdemand.
Contribution vapproach v- vcorrect vanswerAn vincome vstatement vformat vthat vorganizes vcosts vby vtheir
vbehavior. vCosts vare vseparated vinto vvariable vand vfixed vcategories vrather vthan vbeing vseparated vinto
vproduct vand vperiod vcosts vfor vexternal vreporting vpurposes
Contribution vmargin v- vcorrect vanswerThe vamount vremaining vfrom vsales vrevenues vafter vall vvariable
vexpenses vhave vbeen vdeducted.
Contribution vmargin vratio v(CM vratio) v- vcorrect vanswerA vratio vcomputed vby vdividing vcontribution
vmargin vby vsales.
Control v- vcorrect vanswerThe vprocess vof vgathering vfeedback vto vensure vthat va vplan vis vbeing vproperly
vexecuted vor vmodified vas vcircumstances vchange.
Conversion vcost v- vcorrect vanswerDirect vlabor vcost vplus vmanufacturing voverhead vcost.
Cost vbehavior v- vcorrect vanswerThe vway vin vwhich va vcost vreacts vto vchanges vin vthe vlevel vof vactivity.
